Pakistan is in secular decline. Something very different from a cyclical one, which corrects itself with time, stimulus or luck. A secular decline is structural. The very foundations of growth are broken. Unless rebuilt, every recovery is a mirage.
For more than 30 years, our economy – and the politics around it – has run on illusions. Foreign aid. Debt rollovers. Stock market rallies. A fleeting rupee rise. It has always been about the headlines, never the fundamentals. Meanwhile, the productive core kept eroding.
The unavoidable question is this: what sector, what industry can actually lead Pakistan’s turnaround? Globally, services drive growth. IT in India. Finance in Singapore. Advanced hi-tech design in North Asia. But services run on human capital. And Pakistan hollowed out its education in the 1970s.
The result: today, the World Bank says nearly 77 per cent of children at a late primary age cannot read with comprehension. We have produced rote learners, not problem-solvers. As services get more sophisticated – AI-driven, digital, global – our labour force is simply locked out.
Policymakers still dream of an East Asian take-off. That window is now shut. Manufacturing today is automated. It is with robots, not cheap hands. Pakistan, on the other hand, is energy-deficient. There are transmission losses and chronic outages. Lack of cheap, reliable power rules out even basic automation. Competing with robots is hard as it is. Competing with robots and loadshedding is impossible.
Agriculture still employs nearly 40 per cent of our workforce. However, yields are significantly lower than those of India, China or Vietnam. Wheat at three tons a hectare here; four in India; five in China. The water table is collapsing. Climate stress is intensifying. Fragmented farming erodes any chance of scale economics.
Having said that, agriculture can improve. It can play a part in reducing rural poverty. But no modern economy has relied solely on farming for prosperity. At best, it stabilises. It does not transform.
We had gas and water, but we squandered. That leaves mineral and metal resources. Pakistan has copper, gold and critical minerals. Reko Diq alone could reset our balance sheet. In a world hungry for metals, there is real potential. But our history is sobering. Saindak, Thar – projects mired in litigation and opacity. Unless governance changes, resources will be just another wasted promise. We all hope this time is different.
Unfortunately, the real fix is slow and unglamorous. Pakistan’s decline began when education was politicised in the 1970s. Every decade since has produced a weaker cohort. The result is a youth bulge with no skills to deploy. Today, Pakistan spends barely 1.7 per cent of GDP on education – roughly half of what Vietnam and China commit – starving the very foundation of future growth.
Reversing this will take 20 years of consistent work. Curriculum reform. Vocational training. Teacher investment. Depoliticised universities. Painstaking and unglamorous. But without it, every other ‘recovery’ is temporary.
Our best friend, China, knows this story all too well. The Cultural Revolution (1966–76) destroyed its universities. An entire generation lost education and subsequent opportunities.
Then came the reset. In 1977, Deng Xiaoping restored the national exam, reopening universities and reintroducing merit. Students were sent abroad in the tens of thousands. Senior scientists and professors were rehabilitated. The Chinese Academy of Sciences was rebuilt. In a decade, China, with resolve and hard work, managed to restore its knowledge base.
Pakistan needs a similar plan as well as the will to execute it. Education will take decades to fix. In the meantime, our diaspora can fill the gap.
China’s ‘sea turtles’ were not just businesspeople. They were utilised in institutional rehabilitation. Shi Yigong left Princeton, recruited dozens of US-trained researchers and academics and led life sciences at Tsinghua University – building one of Asia’s top biology departments. Shing-Tung Yau, a Fields Medal-winning mathematician, founded a world-class mathematics centre at Tsinghua and trained an entire generation.
Zhang Rujing was a rising executive at Texas Instruments, where he was mentored by Nobel Laureate Jack Kilby. China’s Ministry of Electronics Industry lured him back to jump-start a domestic semiconductor base. In 2000, he founded Semiconductor Manufacturing International Corporation (SMIC), the country’s leading chipmaker, employing and training thousands of engineers.
These were the catalysts of China’s ascendency. China seeded its institutions with its best global talent, who in turn trained thousands at home.
Pakistan’s diaspora is just as deep. Academics in the US and Europe, physicians in the US, engineers in Silicon Valley and finance leaders on Wall Street. Yet they remain disconnected from command posts at home. We have neither a plan to deploy their expertise nor the credibility to inspire them to take the plunge back.
Why not change that? Pick the top 200 in medicine, academia and technology. Give them autonomy and, most importantly, insulation from politics. Place them in universities, regulatory bodies and state-owned enterprises. Let them build islands of excellence that train, inspire and employ the next generation.
Without bold action, Pakistan will remain an economy of illusions – surpluses on paper, donor inflows masking deficits., stock rallies driven by liquidity, not fundamentals and, beneath it all, steady decline.
We can no longer compete on cheap labour in a world of automation. The only way is to compete on brains. That means reversing the brain drain, retraining our people and committing – now – to rebuilding education.
It will take twenty years. But every year we delay, the decline accelerates.
The writer studied at Cambridge and held senior roles in investment banking before founding and leading ventures in healthcare and technology. He now serves on corporate boards in healthcare and finance.